Sainsbury’s: a bank, electricals and light snacks

"Listen, guys. Argos is flying, the bank is delivering 10 per cent of group profit, and clothes sales are ahead of the market. It's just groceries letting us down. Any ideas?". Argos reported sales growth of 14.5 per cent - or 20 to 30 per cent at supermarket outlets. Those sales could have been worse had it not been for a 39 per cent increase in the bank's credit balances, including the transfer of Argos Financial Services' £615m loan book. With tellies selling fast, it doesn't take brain food to realise you should open another 250 Argos Digital stores. Given Sainsbury's policy of having a dividend covered twice by earnings, its shareholders' choice is much like its customers': buy into Argos synergies, more than the nearby groceries.